April 05, 2022

Russian Invasion: Ramifications on Inflation and the Markets

25 minutes

Russia’s invasion of Ukraine is a humanitarian crisis that’s gripped the globe. While difficult to comprehend on a human level, the economic impact of a widespread European conflict can be equally as complicated to unpack.

From inflation to rising gas prices to seemingly unpredictable markets, the state of our economy is enough to make most panic. Luckily, understanding why the Russian-Ukraine conflict has increased inflation and what our government is doing to combat rising costs can dissolve some of that panic.

This week, Doug and Greg discuss the recent market volatility and ramifications of the Russian invasion of Ukraine, unpacking why globalization impacts interest rates, the surefire way to combat market volatility, and why it’s pointless to panic about an imminent economic recession.

Key Takeaways

[00:39] - What Doug thinks about today’s volatile market.

[07:35] - Why a recession may be on the horizon.

[10:31] - How much of inflation is demand-driven versus supply-driven.

[11:07] - How projections on the war in Ukraine have shifted and how inflation and supply chain issues will continue to impact developing countries.

[15:41] - How investors should respond to volatility.

[17:10] - Why today’s volatility highlights the importance of diversification.

[19:37] - Why you shouldn’t panic about an imminent recession.

Quotes

[09:29] - “The silver lining here is that – and we talked about this on a prior podcast – households are in fantastic shape and debt service payments, specifically mortgage as a percentage of disposable income, were at all-time lows before rates crept up.” ~ Doug Stokes

[15:49] - “The range of outcomes is so wide here that I think diversification is the ultimate winner in this sort of framework.” ~ Doug Stokes

[17:47] - “Oil and commodities really have been vindicated as an asset class the last couple years and it really goes to show the importance of diversification. Because the human instinct is to go with what’s worked in the past and that absolutely has not worked in the past but it’s working like magic this year.” ~ Greg Stokes

Links

Cullen Roche

Twitter

Bill McBride

Derek Thompson

Chevron

Exxon

Lemonade

Datadog

Upstart

Peleton

Ben Carlson

Morgan Housel

The Psychology of Money

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Disclosure

The information in this podcast is educational and general in nature and does not take into consideration the listener’s personal circumstances. Therefore, it is not intended to be a substitute for specific, individualized financial, legal, or tax advice. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a final decision.

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